Five years on from the pandemic and Britain’s high streets are struggling. With reduced consumer spending, inflation, and the increased cost of staff, the UKs high street businesses are facing mounting financial pressure.
In an annual report published by leading small business insurance provider Simply Business, 63% of small business owners believe the high street as we know it will be obsolete in the next 10 years.
Surveying over 2,000 small businesses, the annual SME Insights Report unveils the challenges facing Britain’s high street, from falling footfall to high business rates, and the support needed to ensure its survival.
According to the new research a worrying 37% of high street shop owners are planning to close or sell their business in 2025. The soaring costs of running a business (52%) and reduced consumer spending (29%) are two of the leading challenges causing this chain reaction.
When asked what could help keep their businesses open long term while a third (34%) stated lower overheads, while almost half (45%) said an increase in customers.
Though the issues that each business faces can vary, there are practical actions that would offer some relief to almost all.
When asked what the most important action the government could take to better support them, a quarter (24%) believe a reduction in business rates would be key while almost a third (27%) said the government should play an active role in encouraging or incentivising people to shop locally with small businesses. 16% said they’d like to see an increase in tax for big online retailers and national chains.
But the high street might need to evolve from what we know if it is to truly thrive. Asking business owners what would make them more likely to visit their local high street, 61% said more independent businesses and fewer chains, 58% said free or cheap parking, and half (50%) said a wider variety of things to do.
Mark Maciver, owner of barber shop Slider Cuts said, “Rising costs have definitely affected our business. Particularly energy costs as one month we were paying £250, the next it was £1,300, then £1,200. It was all over the place. When you have a business where you’re not making that much profits, when things go up, it can make things a lot tighter.
“One way the government could help me, and other small businesses right now would be easier access to funding”.
Simply Business UK CEO, Julie Fisher said, “The UK’s high streets are an important part of British culture. These vital hubs provide essential services and are crucial for the UK economy – but high street businesses have made clear the stark reality. Our annual SME Insights Report has revealed almost three quarters (74 per cent) have seen customer numbers decline. And in a worrying look to the future, 63 per cent think the UK high street has just 10 years left before it becomes obsolete.
“Seeing so many SMEs across the UK struggling is a serious cause for concern, not just for the founders of these businesses but for the British economy and our wider communities. SMEs provide over £2.8 trillion in annual turnover, and account for over half (60 per cent) of private sector employment. Our high street businesses play a key part in these figures.
“From reduced business rates to initiatives that increase footfall, we encourage the government to acknowledge the fears of Britain’s inspiring entrepreneurs and hear their calls for support.”
